October 20, 2021
Markets

Fed officials say tapering ‘may soon be warranted’ and interest rates rise penciled in for 2022

The Federal Reserve on Wednesday signaled it’s almost ready to taper its bond-buying program and might even move up its timetable for raising interest rates to 2022, reflecting a strong conviction the economy is on the path to full recovery.

Chairman Jerome Powell said the Fed could “easily move” in November to announce it’s scaling back its bond purchases if the economy continues to make further progress.

He also noted that inflation now sharply exceeds the Fed’s 2% target, though he stuck to his view that it should slow considerably over the next year.

The Fed has been buying $80 billion in Treasurys and $40 billion in mortgage-backed securities each month since last summer to keep long-term interest rates low and spur demand as the economy recovered from the coronavirus pandemic.

Since the summer, the Fed has been talking about…

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